West Wits Mining banks $27.5m as African gold production countdown begins
- James Pearson
- 4 hours ago
- 3 min read
West Wits Mining (ASX: WWI) has locked in $27.5 million from predominantly institutional investors to fund its transition from gold developer to producer in South Africa.
The placement strengthens the balance sheet, eliminates near-term funding risk and sets the company on a clear path to first gold production in March at its Qala Shallows mine, part of its broader Witwatersrand Basin project in South Africa.
Management says the raising was initiated via an unsolicited approach from institutional investors, laying down a strong signal that the market is warming to West Wits’ strategy and the underlying quality of its assets.
Under the terms of the deal, the company will issue 343.75 million new shares at 8 cents each, representing a modest 7 per cent discount to the 15-day VWAP. Every two shares come with one free-attaching unlisted option exercisable at 11 cents over three years.
The pricing appears to strike a balance between bringing in cornerstone institutions while limiting dilution for existing shareholders.
The bulk of the funds, about $18.6 million, will be poured straight into mine development at Qala Shallows, the first cab off the rank within West Wits’ broader Witwatersrand Basin project. The company says the placement, combined with existing cash and available financing options, fully funds the operation through to sustainable production, allowing construction to progress with confidence.
However, the raise is not just about getting Qala Shallows over the line. West Wits has deliberately carved out capital to keep the growth story alive. Around $1 million has been earmarked for a scoping study at Project 200, West Wits’ longer-term development strategy at Witswatersand, while $2.3 million will fund drilling at its nearby BRC uranium target. Together, they may eventually expand the company’s exposure beyond initial production and offer shareholders a shot at meaningful upside.
“This funding places the company in a very strong position, fully funding mine development through to sustainable gold production, with first gold targeted for March 2026. Importantly, it allows us to progress construction with confidence while maintaining balance sheet flexibility as we evaluate senior debt options.” West Wits Mining chief executive officer Rudi Deysel
Qala Shallows sits within South Africa’s famous Witwatersrand Basin - the cradle of modern gold mining and the source of more than 1.5 billion ounces historically. In fact, the basin has yielded over 22 per cent of all gold ever mined and for decades was the engine room of the nation’s mining industry.
Between 2021 and 2023, West Wits quietly stitched together a monster 5.025-million-ounce gold resource across its South African footprint. However when it came time to pick a starter mine, one deposit leapt off the page and Qala Shallows emerged as the obvious front-runner, hosting 10.7 million tonnes grading 2.98 grams per tonne for just over a million ounces of gold, including a solid 383,000 ounces locked away as bankable reserves.
The project already comes with much of the hard work done, including an adit, a decline and an existing shaft, giving West Wits a rare head start in a sector where greenfield builds can chew up years and plenty of cash. As development accelerates, ore output is expected to ramp from about 15,000 to 20,000 tonnes a month by March before charging ahead to around 65,000 tonnes a month by year three.
The project’s true mic-drop moment came in July, when West Wits delivered a definitive feasibility study that turned heads across the market. The numbers were eye-watering, pushing out a net present value of US$500 (A$750) million and an internal rate of return of 81 per cent.
The production outlook stacks up just as well. Qala Shallows is forecast to deliver around 70,000 ounces of gold every year for 12 straight years, generating a hefty US$983 million (A$1.5 billion) in post-tax free cash flow.
Those numbers are based on a conservative gold price assumption of just US$2850 per ounce. With the yellow metal now touching all-time highs of US$4690 (A$7012) overnight, it’s anyone’s guess what those figures look like now.
Perhaps the most impressive stat of all, however, sits on the cost side of the ledger. All-in sustaining costs are expected to come in at just US$1289 an ounce, firmly planting Qala Shallows in the low-cost producer camp.
With funding in the bag and operations gathering pace, the focus now is on execution. If West Wits can hit its commissioning and production targets on schedule and within budget, it could be a pivotal moment in South African gold mining, where a historic basin that built an industry gets a fresh lease on life and West Wits transitions from explorer-developer to producer with real scale.
Is your ASX-listed company doing something interesting? Contact: office@bullsnbears.com.au
